PM cowed Reserve Bank, says Beazley

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The Opposition Leader, Kim Beazley, stepping up a campaign for
an inquiry into election advertising, has alleged the Reserve Bank
was weakened and "cowed" by pressure from the Howard
Government.

Mr Beazley said a full inquiry by a former police officer or
judge was needed to allow the Reserve Bank to fight back and
restore its reputation after it was attributed as a source for
Coalition election claims about interest rates and the Labor
Party.

"[The Reserve Bank and the board of the Reserve Bank] have been
weakened by the Howard Government and people cowed by the feeling
that there'll be disapproval if they go the wrong road," he told
the National Press Club in Canberra yesterday.

Mr Beazley's comments followed a Herald report that the
Reserve Bank had asked the Australian Electoral Commission to
investigate advertising and brochures claiming interest rates would
be lower if Labor was kept out of office.

The commission yesterday revealed the Reserve Bank was not alone
in querying the Coalition's interest rates claims during last
year's election campaign.

A spokesman told the Herald the commission had responded
to a second complaint by saying the advertising did not breach any
electoral laws. Confidentially rules prevent the commission from
making more details about the complaint public.

On Friday the RBA released correspondence showing it had written
to the Electoral Commission and a Liberal party official saying it
was "most concerned" about a Coalition brochure and wanted
remaining copies binned.